Bank One's Two-Pronged Image Makeover

  In one move involving ATMs, Bank One is shoring up its public and technological images.
  In 1995, about four years before it was acquired by Banc One Corp., First Chicago NBD Corp. made national headlines when it began charging some customers $3 for teller transactions. The aim was to reduce operating costs by encouraging customers to use First Chicago's automated teller machines, but the move exposed Chicago's biggest financial institution to a tide of criticism in the press and in competitors' advertising as a customer-unfriendly bank.
  In a strategic move unveiled late last year, the combined Chicago-based banking firm, now called Bank One Corp., said it would scrap the charge and add 30 new branches and 70 more ATMs in the Chicago area to try to increase market share after years of flat growth.
  Some of those ATMs will be more advanced than any others the bank has deployed. Indeed, while it was putting its marketers to work promoting the discontinuation of the teller fees, Bank One Dec. 10 quietly became the first U.S. bank to go online with Dayton, Ohio-based NCR Corp.'s ImageMark back-office processing technology that also converts checks deposited at ATMs into electronic images.
  With ImageMark, no envelope is used to deposit cash and checks. In addition to inserting currency bills individually into the ATM directly, consumers insert one check at a time and key in the check amounts. The ATMs create electronic images of the checks, which are sent via a wide-area network connection to the ImageMark processing center. Images of the checks also are displayed on the screen.
  At the center, the amounts on the check images are compared with the amounts customers key in. Receipts show a summary of the transaction, including an image of the check and a breakout of any bills also deposited, by denomination.
  Along with the initial ATM, located in Indianapolis, Bank One said it would deploy seven more in that city plus another in Louisville, Ky., over the next two months. The bank also has deployed a check-imaging ATM backed by ImageMark in its retail banking headquarters in Columbus, Ohio, which is used solely by 6,000 bank employees.
  'More Comfortable'
  A Bank One spokesperson says the deployments represent a planned gradual rollout of more check-imaging ATMs by the bank, which over the next couple years plans to replace all 3,500 of its ATMs with ones that support more functions. In 2003, Bank One will replace 1,000 ATMs, and many of the new ones will support check imaging, the spokesperson says.
  "We expect the check-imaging technology will increase use of the ATMs for deposits as customers feel more comfortable with the technology," the spokesperson says, adding that the bank believes check imaging will improve customer service and transaction accuracy.
  In the initial rollout, Bank One is attaching NCR Personas 72 sidecar units to Personas 77 devices, which support cash withdrawals and other ATM functions. This year, NCR will upgrade its entire line of Personas with built-in check-imaging and bill-accepting technology, says Phil Kasper, NCR assistant vice president.
  NCR planned to roll out an upgraded Personas 90 ATM in January, according to Kasper. The device is designed for use at drive-up and exterior locations.
  "The biggest part of the business case is labor displacement," Kasper says. "Seventy percent or more of the transactions will be automatically balanced with no human intervention."
  Banks also can flag specific accounts or set parameters for when to automatically review check images, Kasper says. And because checks deposited are cancelled and placed in bins separate from the ATM cash safe, banks can hire less expensive courier services to pick up the checks, he says.
  "What this does is dramatically reduce the transportation costs for deposit pick-ups," he says. "The business case is what drives this whole thing."
  Proposed legislation expected to be considered by Congress would do away with the need altogether to pick up checks at ATMs using image technology. "The goal of the act is to make the image legal tender," Kasper says, noting that Congress probably won't vote on the proposal before next fall.
  Kasper says banks can expect to receive pay-back on equipment and operational costs from check-imaging ATMs in 30 to 36 months. Fully upgraded machines are believed to cost at least $40,000 each.
  Wells Fargo & Co. and FleetBoston Financial Corp. are among other banks that are planning to roll out check-imaging programs supported by ImageMark.